Fracking & Leasing; Fear and loathing in the Rockies

There were some strange reactions to sensible decisions in the past two weeks regarding ongoing, emotional battles between the oil and gas industry and those who ask for more environmental protections.

As in politics, all sides claimed victory.

On Wednesday, a U.S. district judge ruled that the Interior must decide within 60 days of selling a federal mineral lease whether to issue it. Just hours after the ruling, a coalition of wildlife and environmental advocacy groups issued a press release titled, “Victory in court for thoughtful energy development.”

The chief plaintiff in the case, Western Energy Alliance, immediately claimed victory in the press, too, and continued with that proclamation in a tweet this morning, “Big victory for oil and gas leasing rights.”

A closer examination suggests, to me, that U.S. District Judge Nancy Freudenthal (wife of former Wyoming Gov. Dave Freudenthal) served both sides a healthy portion of vegetables.

Dustin Bleizeffer

At issue was a 2-year backlog of federal oil and gas leases in the Rockies due in part to protests by environmental groups and due to uncertainty about whether the greater sage grouse would be listed under the Endangered Species Act. Last year, the U.S. Fish and Wildlife Service decided a listing was warranted but precluded due to other ESA priorities.

By the time Western Energy Alliance’s case was argued in U.S. District Court this week, the BLM had cleared most of the backlog. Judge Freudenthal heard oral arguments in the case then ruled from the bench on the same day; 60-day deadline.

“We’re glad that the court recognized industry’s desire for more certainty in the leasing process. And we’re glad that the court has given the government a deadline for making a decision,” Western Energy Alliance’s director of government and public affairs, Kathleen Sgamma, told the Associated Press.

Environmental groups claimed their victory is the same certainty provided in the 60-day deadline. But they explain it differently.

Lisa McGee, National Forests & Parks program director at the Wyoming Outdoor Council, told WyoFile that by allowing the BLM to go forward with the sale of a lease while it is still under protest, the high-bidder for that lease gains a first-in-time claim to it, but he is not guaranteed to eventually receive the lease.

“It could be that the BLM may expedite this decision (within the prescribed 60-days deadline), but it will not be forced to issue,” McGee told WyoFile via email.

Instead, the high-bidder can voluntarily agree to a BLM review beyond the 60 days deadline, or the BLM state director can decide to reject the high bid altogether. This puts the onus on the industry side. If the high-bidder doesn’t submit to a more lengthy review, then a definitive decision will be made within 60-days. Whether the lease is issued or not, at least the bidder’s money isn’t tied up in a lease held in limbo. He either gets a lease, or he doesn’t have to cough up the money he bid.

“The important holding from our perspective, is that the BLM retains discretion after the sale not to issue. It is not forced to issue the leases as the energy companies argued,” said McGee.

In a phone interview with WyoFile on Thursday, Sgamma conceded the latter point: “Certainly, the judge’s ruling did not go as far as we would have liked.” Conversely, Sgamma added, environmental groups wanted protests to last in perpetuity.

Apparently, both sides can live with the ruling, disappointing only some in the press who don’t like vegetables.

FRACKING EVIDENCE

Last week, the U.S. Environmental Protection Agency launched a new study to determine if hydraulic fracturing is contaminating drinking water, focusing on seven different areas across the country.

None in Wyoming.

Jeffrey Locker stands next to a natural gas well behind his home near Pavillion. (Dustin Bleizeffer/WyoFile - click to enlarge)

State and industry officials here suggested this was vindication of, first, their claim that there is no “documented” case of drinking water being contaminated by hydraulic fracturing in Wyoming and, second, the fact that Wyoming’s frack-chemical disclosure rules are among the toughest in the nation.

Environmental groups noted that it’s easy to have no documentation linking fracking to water pollution when the industry was allowed, for decades, to perform hydraulic fracturing with no baseline groundwater sampling and recording. In other words; no documentation. Such is the case in Pavillion.

Wyoming Oil and Gas Conservation Commission supervisor Tom Doll said he strongly recommends to drillers in the Niobrara oil exploration play to gather this baseline documentation prior to drilling so the industry and the state can adequately determine if fracking ever leads to contamination of drinking water in southeast Wyoming. Yet Doll has declined to seek a rule forcing the industry to do so.

Lacking evidence may be reason to not convict hydraulic fracturing as a source of drinking water pollution, but it’s no occasion to spike the football and declare victory.

After two years of not getting satisfactory answers or efforts from the Wyoming Department of Environmental Quality, several Pavillion-area families had to drive to Denver and beg EPA Region 8 officials to investigate what’s polluting their drinking water. Some speculate the resulting EPA-DEQ investigation may have factored into the Interior’s decision to not include Wyoming in this most recent hydraulic fracturing study.

State and industry officials have repeated the “no documented case” mantra ever since the Pavillion fracking trial began many years ago, but it may not serve them as well as they wish. Rather than instill confidence in their ability to protect drinking water, state and industry officials run the risk of appearing disingenuous in their pursuit of definitively finding answers in this matter.

— Contact Dustin Bleizeffer at 307-577-6069 or dustin@wyofile.com.

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Published on June 30, 2011

  • Maureen McCarron

    Good information. Please keep up your coverage of this issue, as in my part of the country it is difficult to get anything like “balanced” reporting!

  • Chris Merrill

    This is excellent analysis, Dustin. On the Industry lawsuit: The ruling really does seem practical and fair to both sides because (1) it gives companies more certainty that something will be decided within 60 days and (2) it reaffirms that the BLM has the discretion not to issue leases after some deliberation.

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